PATRIZIA Immobilien AG

Transcription

1 PATRIZIA Immobilien AG Business model, Financials and Market May 2011 PATRIZIA Immobilien AG PATRIZIA Bürohaus Fuggerstraße Augsburg T +49/8 21/ F +49/8 21/ immobilien@patrizia.ag

2 Agenda BUSINESS MODELL BUSINESS DEVELOPMENT AND FINANCIALS Q OUTLOOK 2011 GERMAN RESIDENTIAL MARKET APPENDIX 2

3 PATRIZIA The Real Estate Investment House WHO WE ARE Founded in 1984 by Wolfgang Egger, CEO and majority shareholder (49.97%) 27 years of experience in residential property resale PATRIZIA is a real estate investment house, i.e. a real estate agent and full service provider Holistic, one-stop real estate expertise Organically grown with first acquisition on an organizational level in Dec 2010 (LB Immo Invest GmbH, investment company) WHAT WE DO Fully integrated business model We invest on our own account and for third parties We offer direct and indirect investments in residential and commercial real estate in Germany and Europe As a strategic partner, we offer customized investment products to national and international institutional and private clients e.g. as fund vehicle or co-investment We operate nationwide with own local teams ASSETS UNDER MANAGEMENT (IN EUR MILLION 1 ) FOR THIRD PARTIES OWN INVESTMENTS TOTAL Residential , ,639.1 Commercial 3, ,553.1 Total 4, , ,192.2!) Data from various sources, including LBII. Where book value is not available, investment volumes, acquisition costs or fair value have been considered, without calculation of potential changes in value 3

4 PATRIZIA Nationwide Platform with Local Market Expertise HEAD OFFICE: Augsburg BRANCHES: Berlin, Cologne, Dresden, Frankfurt, Hamburg, Munich, Stuttgart EMPLOYEES: 427 permanent employees incl. 14 trainees (March 2011), thereof Corporate/Holding 125 Commercial 69 Residential 94 Project Development 11 Property Management 114 Converted to full-time positions: 366 4

5 PATRIZIA The Real Estate Expert Exit: Investment realization Placement Marketing preparation / sales management Research Fund raising Due diligence Acquisition Optimization cash income / net operating income Professional property management Refurbishment Fund management, portfolio management Value-oriented asset management approach 5

6 Segment Reporting 2011 Residential and Commercial 27-year in-depth real estate know-how and profound market knowledge, EUR 5bn assets under management RESIDENTIAL COMMERCIAL SPECIAL REAL ESTATE BUSINESS CORPORATE Portfolio Management: Asset and Investment Management Own Investments: Residential Property Resale Asset Repositioning Residential Funds via PATRIZIA Immobilien Kapitalanlagegesellschaft mbh Portfolio Management: Asset and Investment Management Own Investments Co-Investment PATRoffice Commercial Funds via LB Immo Invest GmbH Both residential and commercial Project Development Own Investments (Frankfurt/Main, Düsseldorf, Augsburg) Services for thirdparty clients Property Management For own investments and third-party clients Holding: Internal services, e.g. Research Financing Accounting/tax Controlling Legal affairs IT Marketing Communications etc. 6

7 PATRIZIA s Own Portfolio 1 RESIDENTIAL PROPERTY RESALE Sale of single units to tenants, owner-occupiers and private investors via own local sales force in nationwide subsidiaries, approx. 2,700 units for sale ASSET REPOSITIONING Exit via block sales, approx. 6,400 units for sale REGION/ CITY UNITS (NUMBER) SHARE (%) AREA (SQM) FUTURE PROSPECTS 2 Munich 3, % 236,098 top Cologne / Dusseldorf 1, % 120,993 good Leipzig % 63,730 very good Berlin % 47,317 stable Frankfurt/Main % 50,168 top Hamburg % 49,847 stable Hanover % 27,574 stable Regensburg % 25,753 very good Dresden % 10,284 very good Friedrichshafen % 3,214 very good Total 9, % 634,978 1 As of March 31, According to Prognos/Handelsblatt

8 Residential Funds PATRIZIA IMMOBILIEN KAG (PATRIZIA WOHNINVEST KAG FROM JUNE 1, 2011) Five special funds with total investment volume of EUR 1.6 bn, EUR 664 million already invested in residential real estate in Germany and Europe Most of the services are provided in-house by other subsidiaries, service fees as intercompany revenues INVESTMENT COMMITTED VOLUME EUR MILLION VOLUME EQUITY INVESTED PATRIZIA German Residential Fund I PATRIZIA EuroCity Residential Fund I VPV Immo PATRIZIA I (Transfer fund) PATRIZIA Urbanitas PATRIZIA Domizil I TOTAL 1, PATRIZIA GERMAN RESIDENTIAL FUND I: Focus on residential real estate in Germany, launched in 2007 PATRIZIA EUROCITY RESIDENTIAL FUND I: Focus on Scandinavia, France, the Netherlands; placement completed, launched in 2008 VPV IMMO PATRIZIA I: Transfer fund with VPV Lebensversicherungs-AG (insurance company), commercial properties were mainly transferred, launched end of 2009 PATRIZIA URBANITAS: Individual fund, tailored to one long-term-oriented largescale investor, focus on residential properties not exceeding 10 years of age, launched in January 2010 PATRIZIA DOMIZIL I: Individual fund, set up for a German institution for professional retirement provision, focus on newly built residential properties, launched in September 2010 As of March 31,

9 Commercial Funds (I) LB IMMO INVEST GMBH (PATRIZIA GEWERBEINVEST KAG FROM JUNE 1, 2011) Asset management company, acquired from HSH Real Estate AG with effect from January 3, 2011 (94.9% stake) 13 special funds, mainly invested in commercial real estate Investors are mainly savings banks, insurance companies, pension funds MODULAR FUNDS INDIVIDUAL FUNDS LABEL FUNDS Investors can create a diversified portfolio and achieve the desired risk/reward profile by investing in different funds. Funds are launched based on the specifications of an individual investor. Real estate portfolio can be newly established or transferred by the investor. Provision of a fund platform in accordance with the German Investment Act. Asset management, purchase and sale are the responsibility of the investor or the investor s service provider. IN EUR BN MODULAR FUNDS INDIVIDUAL FUNDS LABEL FUNDS TOTAL Gross fund volume Net fund volume Subscribed capital

10 Overview of Special Funds of LB Immo Invest NAME LAUNCHED IN VOLUME INVESTED GROSS FUND VOLUME MODULAR FUNDS 1, ,229.3 LB Handels-Invest Deutschland I LB Büro-Invest Europa I LB Wohn-Invest Deutschland I LB Handels-Invest Europa I LB Hotel-Invest Deutschland I LB Pflege-Invest Deutschland I INDIVIDUAL FUNDS SV Europa Direkt LB-VA ImmoInvest LB HanseMerkur Invest LB Immo Invest Saar LABEL FUNDS GLL BVK Internationaler Immobilien-Spezialfonds LB Immo HBL TOTAL 2, ,339.7 As of March 31,

11 Asset Allocation of LB Immo Invest ASSET ALLOCATION BY REGION 1 ASSET ALLOCATION BY SECTOR 1 5,1% Germany 3,1% 2,7% 1,5% 0,6% 5,2% France 6,8% Office 7,4% 10,4% 10,8% 58,5% USA UK Netherlands Finland Belgium Sweden 8,2% 11,9% 26,0% 41,9% Retail Residential Care Hotel Others 1 As of March 31,

12 Commercial Co-Investment PATRoffice Actively managed co-investment with two of the leading European pension funds: APG (Netherlands) and ATP (Denmark) PATRIZIA holds a 6.25% stake PATRIZIA is responsible for the purchase of the entire portfolio and asset management Investment primarily in German commercial real estate Total volume invested: EUR 350 million Launched in 2007 Planed duration: 7 years Property out of the PATRoffice Portfolio: Münster (Germany), Regina-Protmann-Straße 12

13 Agenda BUSINESS MODELL BUSINESS DEVELOPMENT AND FINANCIALS Q OUTLOOK 2011 GERMAN RESIDENTIAL MARKET APPENDIX 13

14 Residential Property Resale Single units sales 27.9% below Q Buyers: 72.7% private buy-to-let investors, 24.2% owner-occupiers, 3.0% tenants Average price/sqm: EUR 2,260, price depends on regional sales mixture (e.g. share of sales in Munich decreased from 77% to 57%)

15 Asset Repositioning Block Sales Two smaller block sales in Hamburg with 18 and 45 units were realized in income in Q1 Average price per sqm: EUR 1,

16 Key Earning Figures Q1 Q EUR 000 Q EUR 000 CHANGE % Purchase price revenues 27,750 31, Purchase price revenues from residential property resale 20,650 31, Purchase price revenues from asset repositioning (inventories) 5, Purchase price revenues from investment property* 1, Rental revenues 14,362 16, Total revenues 50,595 54, EBIT 11,722 13, EBIT adjusted 12,214 13, EBT 12,150-5, EBT adjusted 590 2, Net profit 9,801-4, * Not included in revenues 16

17 Split of Revenues Revenues did not reach last year s level for Q1 (EUR 54.8 million, -7.7%) Purchase price revenues of EUR 26.2 mn from the sale of inventories vs. decreases in the book value of EUR 22.1 mn Rental income exceeds our affecting financial payments (EUR 11.6 mn) by 23.6%; ongoing maintenance (EUR 1mn) included by 15% 14,4 4,1 1,4 4,6 1,6 20 5,5 50, ,6 0 Single unit sales Block sales Rental income (without ancillary costs) Funds Revenues other services Others (ancillary costs) Total revenues Purchase price revenues from the sale of investment property In EUR million 17

18 Financial Result Market valuation of interest rate hedges had a positive impact of EUR 12.1 million EUR 000 Q Q FY 2010 Interest on bank deposits Income from securities Income from interest hedges Changes in the value of derivatives 12, ,546 Other interest Finance income 13, ,494 Interest on revolving lines of credit and bank loans -5,283-5,036-25,782 Expenses from interest hedges -4,634-5,882-23,024 Changes in the value of derivatives ,241-12,172 Other finance costs -1,957-1, Finance cost -12,763-19,159-61,250 FINANCIAL RESULT ,915-49,756 Without valuation effects of derivatives Adjusted finance income Adjusted finance cost -11,874-11,918 49,078 Adjusted financial result -11,623 11,719 48,130 18

19 EBT Adjustments EBT ADJUSTED Q EBT ADJUSTED Q ,7 0,4 12, , EBIT Financial result EBT (IFRS) -12,1 Profit/ loss from interest rate hedges 0,5 0,6 Amortization (fund management contracts*) EBT adjusted EBIT -18,9-5,1 Financial result 7,2 2,1 EBT (IFRS) Profit/loss from interest rate hedges EBT adjusted * Acquisition of LB Immo Invest: Fund management contracts assigned to other intangible assets are subject to amortization over the expected remaining life of the contracts. 19

20 EBT adjusted by Quarter Elimination from profit/loss from non-cash market valuation of interest rate hedges Without amortization of fund management contracts (since Q1 2011) IN EUR MILLION 9,2 0,2 4,4 5,3 2,1 2,9 3,1 4,6 0,6-0,8-2,5-7,8-4,7 Q Q Q Q Q Q Q Q Q Q Q Q Q

21 Segment Reporting Q EUR MILLION RESIDENTIAL COMMERCIAL SPECIAL REAL ESTATE BUSINESS CORPORATE / CONSOLIDATION GROUP Q Third-party revenues Intercompany revenues Finance income Thereof market valuation income derivatives Finance cost Thereof market valuation expenditures derivatives Segment result EBIT Segment result EBT Segment result EBIT adjusted Segment result EBT adjusted

22 Bank Loans 73% of loans are hedged by means of interest rate hedging instruments (will expire in July 2014 at the latest) Fixed interest rate guaranteed: 4.07% In Q1, cost of financing (incl. margin and processing fee) amounted to 4.95% on the average bank loans Share of long-term bank loans increased to 58% due to longer duration than the operating business cycle of 3 years (1) prolongation of investment property loans until June 30, 2014 (2) Financing of LB Immo Invest until March 31, 2015 EUR BANK LOANS VS. EQUITY RATIO Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q % 25% 20% 15% MATURITY AMOUNT OF LOANS FALLING DUE AS OF MARCH 31, 2011 YEAR QUARTER EUR 000 % , Q2 29, thereof Q3 20, Q4 4, , Q1 4, thereof Q3 43, Q4 41, , thereof Q1 4, Q4 72, , Q1 4, thereof Q2 588, Q3 14, , thereof Q1 7, TOTAL 834,

23 Net Asset Value Q Q Q Q Q Q Q Q Q Q Q Q Q Q NAV/share share price at quarter's end Q Q Q Q Q Q EUR /31/10 06/30/10 09/30/10 12/31/10 03/31/11 Investment Property (fair value) 657, , , , ,471 Participations (PATRoffice) 3,090 3,090 3,090 3,090 3,090 Inventories (at cost) 655, , , , ,333 Bank balances and cash 53,530 58,801 64,124 70,537 49,656* - Bank loans -1,029, , , , ,231* Net Asset Value (NAV) 339, , , , ,319 Number of shares 52,130,000 52,130,000 52,130,000 52,130,000 52,130,000 NAV per share EUR 6.51 EUR 6.52 EUR 6.70 EUR 6.86 EUR 6.70 Share price at the end of the quarter EUR 3.25 EUR 2.95 EUR 3.24 EUR 3.84 EUR 4.92 * Without acquisition of LB Immo Invest, adjusted figures 23

24 Agenda BUSINESS MODELL BUSINESS DEVELOPMENT AND FINANCIALS Q OUTLOOK 2011 GERMAN RESIDENTIAL MARKET APPENDIX 24

25 Outlook 2011 (I) FORECAST CONFIRMED: EBT ADJUSTED EUR16-17 MILLION Only slight improvement in earnings in Q2 expected, business should pick up in H2 Properties that have been put on the market since beginning of 2011 should have a noticeable effect on earnings in Q3 and Q4 Two further block sales with 12 and 25 units in the greater Hamburg area were notarized in April; recovery in block sales in Q3 and Q4 as well Debt reduction of approx. EUR 230 million till year-end (the reductions from real estate sales have already been offset against new finance for acquisitions) Equity ratio of at least 25% (has already been achieved in Q1: 25.1%) Further purchases for the special funds, investing the capital promised by the fund investors. In particular, LB Immo Invest can now concentrate fully on new business following the change in ownership and successful integration into the group. New business line Alternative Investments with focus on complex, non-standardized real estate transactions (1) purchase of financially or operationally distressed real estate companies and/or portfolios (2) restructuring the acquired properties in a sustained manner with the aid of PATRIZIA s comprehensive real estate expertise (3) position them on the market again successfully Further Co-Investments: first co-investments till year-end 25

26 Outlook 2011 (II) DIVIDEND POLICY If we achieve our profit target and our equity base is at least 25% we will pay out a dividend Given the appropriate business success, 20-25% of the EBT adjusted should be distributed as dividends CALCULATION EBT adjusted (according to forecast) Thereof 20-25% equates to EUR million EUR million Number of shares in issue 52,130,000 Potential dividend per share EUR 0.06 EUR

27 Agenda BUSINESS MODELL BUSINESS DEVELOPMENT AND FINANCIALS Q OUTLOOK 2011 GERMAN RESIDENTIAL MARKET APPENDIX 27

28 German Market Supported by Strong Fundamentals NO BOOM NO CRASH Most European countries have experienced a steep increase in their house prices since 1995 and now see dramatic decreases since the beginning of the sub-prime crisis In contrast to that, Germany has more or less stable house prices since 1995 and therefore does not suffer from the current market environment HOUSE PRICE DEVELOPMENT (INDEX 1998 = 100) OWNER OCCUPANCY RATE (IN %) FR DE IE ES UK Switzerland Germany Austria France EU-Average USA UK Italy Greece Spain 35% 41% 57% 58% 63% 68% 71% 73% 84% 87% 1 Source. PATRIZIA Research, OECD 2 Source: PATRIZIA Research, Eurostat, Federal Statistical Office, OECD

29 Investment Prospects of Regional Residential Markets REGIONAL ANALYSIS IN GERMANY NECESSARY An analysis of the opportunities and risks of residential investments needs to be carried out at local level and to include both supply and demand factors. On the supply side above all the provision of apartments and the structure of the housing stock are of importance for a potential investor in rented residential real estate. On the demand side demographic developments and purchasing power are the core factors to be considered in an initial location analysis. These two factors exert a decisive influence on the stability of the cash flow of the investment. far below average below average average above average high above average 29

30 Economic Prospects Regional Developments IMPORTANCE OF GERMAN METROPOLITAN AREAS INCREASES STRONG PRICE DIFFERENTIATION: Rents and prices will only increase in attractive regions, i.e. regions with positive economic prospects higher income level population growth GERMANY TENDS TO REGIONAL RE-URBANIZATION Index of Metropolitan areas Urban catchment area and population density major urban center space between peripheral area freeway Source: Regional Planning Report 30

31 Future Prospects by Region 2010 IMPLICATIONS FOR PATRIZIA 76% of our Portfolio is located in areas with top, very good or good future chances for economic growth. Regional capital Top chances Very high risk PATRIZIA portfolio locations share of PATRIZIA s portfolio 1 Top future prospects 46% (Munich, Frankfurt) Very good future prospects 15% (Hamburg, Dresden, Friedrichshafen, Regensburg) Good future prospects 15% (Cologne/Dusseldorf) With future prospects Stable risk-reward-relation 23% (Berlin, Hanover, Leipzig) With future risks Above average future risks High future risks 1 As of March 31, 2011 Source: Prognos/Handelsblatt

32 Economic Strengths (Status quo) and Dynamics Status quo of locations strength PATRIZIA portfolio locations Highest strength Very high strength High strength Medium strength Low strength Very low strength Lowest strength Changes over time PATRIZIA portfolio locations Highest dynamic Very high dynamic High dynamic Medium dynamic Low dynamic Very low dynamic Lowest dynamic 32

33 Demand for Housing An increasing number of households is seen as the main driver for housing demand, compensating for the general decrease in the population. Hamburg HOUSING DEMAND FORECAST (Index 2000 = 100) 130 Hanover Berlin 120 Cologne Leipzig Dresden Frankfurt Bavaria-Munich NRW-Cologne/DD Berlin Regensburg Friedrichshafen Munich PATRIZIA portfolio locations below -4% 0% to 4% -4% to 0% 4% to 8% 8% to 12% 12% and more Source: Empirica Institute 33

34 Household Formations CHANGE IN NUMBER OF HOUSEHOLDS FROM 2005 UNTIL 2025 IN % While the population in Germany will decrease, the household formations are expected to steadily rise German housholds in m (left side) Population inm (right side) PATRIZIA portfolio locations until below until below -3-3 until below 3 3 until below an more Source: Federal Office for Building and Planning, Bonn 34

35 Vacancy Risk ESTIMATION OF VACANCY RISK IN RENTED MULTI-FAMILY HOUSES / MULTI-STORY BUILDINGS 2005 UNTIL 2020 The vacancy risk for residential real estate is in Western German regions much lower than in Eastern Germany due to better future prospects. PATRIZIA portfolio locations very low low average high very high Source: Federal Office for Building and Planning, Bonn 35

36 Mietspiegel The Mietspiegel is an index of local residential markets rents published by each major municipality in Germany. The rent index contains average rents for apartments for each sub-market according to several factors, including: quality of the sub-market, age of building construction, average unit size, etc. EXISTING TENANTS A landlord is not allowed to raise rents for current tenants above the level indicated in the index, with a cap of a 20% increase over each 3 year time horizon Quality portfolios with below market rents stand to gain the most income growth, in particular if NEW TENANTS Past owners under-managed the portfolio and If the Mietspiegel index levels are above current levels or increasing significantly Empty apartments can be rented out at every price that the tenant agrees to pay 36

37 Building Permits and Completions NUMBER OF CONSTRUCTION PERMITS NUMBER OF COMPLETIONS e Single-family housing Multi-family housing Total units Single-family houses Condominiums Rented apartments For the first time there were again more building permits issued in Germany in 2009 compared with 2008 that were not due to tax pull-forward incentives. A higher number of housing completions can be expected in 2010 due to the close historical relationship between permits and completions. Rising construction activity can also be expected in subsequent years given the very positive macroeconomic performance and positive housing construction indicators. This will be increasingly driven by the construction of apartment buildings since growing urbanization is shifting housing demand to the cities. In EUR

38 Agenda BUSINESS MODELL BUSINESS DEVELOPMENT AND FINANCIALS Q OUTLOOK 2011 GERMAN RESIDENTIAL MARKET APPENDIX 38

39 PATRIZIA share PATRIZIA SHARE Q AT A GLANCE ISIN DE000PAT1AG3 SIN (Security Identification Number) PAT1AG Code P1Z No. of shares in issue as at March 31, ,130,000 Q high* / low* EUR EUR 3.77 Closing price as at March 31, 2011* EUR 4.92 Share price performance Q1 28.1% Market capitalization as at March 31, 2011* EUR million Average trading volume per day Q ,100 shares Indices SDAX, EPRA, GEX, DIMAX RESEARCH CURRENT ESTIMATES BANK ANALYST DATE RATING PRICE TARGET Bankhaus Lampe Frank Neumann Buy EUR 7.00 Berenberg Bank Kai Klose Hold EUR 5.50 Close Brothers Seydler Research Manuel Martin Buy EUR 5.70 DZ Bank Ulrich Geis Buy EUR 6.00 HSBC Thomas Martin Underweight EUR 5.00 J.P. Morgan Harm Meijer Neutral EUR 5.75 UniCredit Burkhard Sawazki Hold EUR 6.00 Warburg Research Torsten Klingner Hold EUR 5.20 = DEVELOPMENT SHAREHOLDER STRUCTURE 3.2 % 1.2 % 20.8 % 49,97 % 24.8 % First Capital Partner (Wolfgang Egger) Other institutional investors Private shareholders Alfred Hoschek (former CIO) Other PATRIZIA managers *) Closing price at Frankfurt Stock Exchange Xetra trading 39

40 Financial Calendar and Contact Details June 29, 2011 Annual General Meeting, Augsburg August 10, 2011 Interim report for the first half of 2011 October 19, 2011 Real Estate Share Initiative, Frankfurt November 9, 2011 Interim report for the first three quarters of 2011 The conference calls about the financial reports will usually be held at 3 pm CET. Invitations and dial-in numbers will be provided in advance. To be always updated, please have a look on our website MARGIT MILLER HEAD OF INVESTOR RELATIONS PATRIZIA Immobilien AG PATRIZIA Bürohaus Fuggerstraße Augsburg T +49/8 21/ F +49/8 21/ M +49/1 51/ margit.miller@patrizia.ag 40